The property market may be in the doldrums but the real economy isn't in bad shape, as recent growth figures indicate

The third quarter GDP and GNP figures were out last week and they are beginning to show improvement. You have to skip past the headline figures and get into the detail to get a real feel for the trend in the economy. It's worth doing this, because it might give you a bounce in your step as we head into Christmas. You might even buy something.

Overall, GNP grew by 1.1% in the third quarter and GDP picked up 0.5%. This is the first quarter since the beginning of this crisis that both these figures have improved in the same period. I know these numbers look small but behind this simple set of percentages is a mountain of human effort by business people and their employees. Seeing the numbers back in the black should act as a record of this effort.

Scanning across the various industry sectors provides the most interesting view of Ireland Inc. In most places, it is reasonably stable and looks to be getting ready for growth. We know the story too well by now but it is interesting to see it analysed in black and white. The sectors that have taken the most pain are construction and consumption. The property boom was financed by a huge expansion in personal credit and a property bubble. The asset collapse has driven down this consumption through unemployment and the wealth effect. We all feel a lot poorer so we act a lot poorer.

The name of the game for Ireland 2.0 is exports from an expanding industrial base. This is the good news in the figures. Exports were over €40bn in the third quarter. This is the engine room for the Irish economy and it has a lot of slack to take up in terms of the unemployed and surplus capacity in the form of buildings and infrastructure.

Export-led economic growth is often slow and deceptive, and to many people in a dark mood it may appear initially as a mirage shimmering off in the distance. It is very real and we are at the oasis and can start drinking again. To put the €40bn in context, let's look at the same third quarter data for 2006 at the height of the boom. Exports were only €35bn in that record year. Personal consumption is only slightly off at just over €21bn, down from €22bn. The gaping hole in the numbers is the collapse in construction, down from almost €3.5bn to under €1.5bn.

Construction was a honey pot for the government, a big employer, and formed the backbone of the banking system. It is also is where all the pain has come from. It's a lot more difficult to tax the export sector because the capital in it can be flighty. Export companies do not always require a lot of banking services because by the nature of their success, they often become self-funding and are cash positive. The ironic thing about banking is that they have to lend to weaker companies who are a higher credit risk because successful companies do not need them.

The economy is primed for the future with its new sleek low-cost base. Sorry to those who hate their pay cut, but it is in the national interest. We have got to be good value and smart to get wealthy again.

To complete the puzzle for a prosperous future, we need to liberate people from their past and the legacy effect of the bubble. This is the reason for a modern bankruptcy system. All this talk of five to six years in the dark is utter rubbish from the Law Reform commission. The UK is a dynamic modern economy and the price of failure there is set at 12 months. That's why people are moving to the UK from all over Europe to go bankrupt. The flood from Ireland is about to begin because of the lack of progress in dealing will our balance sheet problems.

I know that many people think that failing in business should require a lengthy punishment term in bankruptcy and they are completely wrong. If we don't fix this part of our economy quickly, thousands will be UK-bound, taking their talent and business expertise with them. People may not like risk-takers when they fail but everybody cheers when they succeed. The vast majority of businesses fail, so we need to face up to this with new laws rather than stick our head in the sand again.